Discover Financial Services Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Discover Financial Services (NYSE:DFS) will unveil its latest earnings on Tuesday, June 19, 2012. Discover Financial Services is a credit card issuer in the United States and an electronic payment services company.

Discover Financial Services Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 95 cents per share, a decline of 12.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 86 cents. Between one and three months ago, the average estimate moved up. It has risen from 94 cents during the last month. For the year, analysts are projecting profit of $4.01 per share, a decline of 1.2% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 26 cents, reporting net income of $1.18 per share against a mean estimate of profit of 92 cents per share.

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A Look Back: In the first quarter, profit rose 35.7% to $631 million ($1.18 a share) from $464.9 million (84 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 3.8% to $2.2 billion from $2.12 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 6.3% in revenue from the year-earlier quarter to $1.85 billion.

Stock Price Performance: Between May 15, 2012 and June 13, 2012, the stock price dropped $1.28 (-3.8%), from $33.40 to $32.12. The stock price saw one of its best stretches over the last year between January 6, 2012 and January 17, 2012, when shares rose for seven straight days, increasing 11.1% (+$2.70) over that span. It saw one of its worst periods between May 1, 2012 and May 8, 2012 when shares fell for six straight days, dropping 2.9% (-$1.01) over that span.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose more than twofold in the third quarter of the last fiscal year and 46.6% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 2.5% in the second quarter of the last fiscal year, 2.4% in the third quarter of the last fiscal year and 9.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Analyst Ratings: With 15 analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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